Second jobs : Practical considerations for employers

Second jobs, or even third jobs are being sought by employees to try and stay above the breadline. Skyrocketing inflation and interest, a fiercely competitive salary market and ever-increasing utility costs are causing the cost of living crisis to be felt not just by individuals, but also businesses nationwide.

Considerations by primary employer on second jobs

Seeking extra employment could have implications on primary employment for both the employee and their employer. Here we review certain legal and practical considerations that should be had by an employee’s primary employer before additional employment is taken on.

Legal considerations around second jobs

There are a number of legal considerations to be thought through around employees with second jobs. They are:

Implied terms

Implied terms are obligations on an employee and/or employer that are not always written in employment contracts but are inferred into them by the common law. A key one here is the duty of fidelity and good faith. This restricts an employee from working in competition with their employer. However, it is not a blanket ban on an employee taking on a second job if they are not competition with their employer nor causing harm to their employer’s legitimate business interests.

The implied duty to not compete has been found to apply even in an employee’s spare time (i.e out of working hours). However, the courts have been cautious to not apply this too strictly; for instance, in Nova Plastics v Froggatt [1982] IRLR 146 the tribunal found that it was not a breach for an odd-job man to do some work for a rival business in his spare time, as this could not be said to cause any serious harm to the employer. Nevertheless, employers may still be protected as an employee should err on the side of caution where their role is one that requires a high level of skill and where they are privy to information of a sensitive nature, as the tribunal may view this as creating circumstances where the employee would have known of the harm they could be causing the employer. Therefore, regardless of the express provisions in an employment contact, in some high skilled circumstances an employer may benefit from common law protection.

Regulations

Further, if approached or made aware that an employee has or is looking to take on secondary employment, the employer should have consideration for the Working Time Regulations and specifically the 48-hour week limit. As this provision applies to all forms of work collectively and does not disseminate the time spent working for each individual employer there is a real risk that if an employee is working a second job that this could be breached. It is therefore important to review your employees’ employment contract to determine whether or not there is an opt out, and if it is not, whether it would be wise for an employee to do so.

Express terms

An employment contract may also contain provisions that prevent an employee from seeking further employment. These can be very simple as set out below:

“You shall not work for anyone else while you are employed by the company without our prior written approval.”

Very simply, this restricts an employee seeking additional employment without first informing their current employer and the current employer consenting to this. This level of detail would be suitable for a junior member of staff; however, for a more senior employee the following may be more suitable:

“During your employment you shall, unless prevented by [ill health], devote the whole of your time, attention and abilities to our business and not work for anyone else without our prior written approval.”

This provides a little more protection to the employer as it not only prevents the employee from seeking alternative employment but also requires the employee to devote the whole of their time etc, to the business. This, interpreted literally, would restrict the employee from working another job as this would impact and neglect their obligations to their main employer.

This clause could be developed further by providing caveats on the nature of work that the employee can and cannot do, and the level of authorisation that is required before an employee can seek further employment. For instance, in certain companies a senior employee may require the approval of the board of directors or in some instances the shareholders.

There should also be a consideration of the wording relating to restrictive covenants. Whilst these are usually post-termination restrictions, caution should be shown to ensure that these covenants are not drafted in such a way that it covers acts and omissions within employment.

Whilst an employer may not consider it necessary to make retrospective changes to existing employees’ employment contracts, these amendments could be beneficial to make for any new employees.

Practical considerations

Whilst an employee may feel that it is necessary to take on additional employment to provide for themselves/their family or to maintain a standard of living, a wider consideration should be given to the repercussion that could result. Working multiple jobs will likely cause a lot of stress; whilst the additional employment may not be the most arduous task or mentally draining task, the time spent working a further job will leave them feeling fatigued. The result of this could be a fatigued and underperforming employee as they simply have over worked themselves to a point of burn-out.

Practical solutions

Now that we have focused on implications and considerations that should be had, we will discuss what to do about it. As an employer you should welcome an open dialogue in relation to financial concerns and solutions with employees and employees should feel as though this dialogue is welcomed. This will not only ensure that trust and confidence is maintained in the employee/employer relationship but also create a path for consents to additional employment as discussed in the express terms section above. Further, an employer should consider adopting a financial wellbeing policy. ACAS has provided guidance that these should not only signpost places that support can be provided but also include:

• reassurance that a fair and reasonable wage will be paid;
• commitment to developing skills for employee progression;
• employee benefits;
• signposts to financial education sources;
• signposts to external financial guidance;
• employer’s commitment to flexible working;
• the working hours the employer will provide; and
• financial information for key life stages, e.g. maternity pay.

As alternatives to employees seeking second jobs, an employer could consider some other options to support staff. Obviously, the simplest route would be for the employer to increase the employee’s pay. This could avoid the need for additional employment to be sought and not bring into question any contractual or practical considerations. However, this may not be feasible or desirable for an employer.

The employer (workload depending) could also introduce an enhanced overtime scheme, allowing employees to take on extra shifts/hours to boost their pay. However, an employer should ensure that the extra work taken on is not excessive so that it is detrimental to the physical and mental well-being of staff as discussed above in practical considerations.

Additionally, as an employer you could also consider cash alternatives. The following are a number of schemes that employers could implement or educate staff about which, subject to tax advice, could provide an inadvertent cash flow benefit:

• Company Car – Some employees may currently lease a car personally which is very expensive to them as the payment is taken out of their net pay. You could provide for an ultra-low emission car leasing arrangement scheme whereby the employee for a reduction in their gross pay receives a car (obviously this is a taxable benefit and tax advice should be sought prior to any scheme being implemented). This may (depending on circumstances) reduce the employee’s PAYE and NI costs therefore saving them money.
• Food Vouchers – You could provide food subscription vouchers for your employees (i.e Gusto, Hello Fresh etc.). Not only would these save the employee money, but it would ensure that, in a time of record inflation, employees are eating correctly. This could benefit from favourable tax treatment subject to the necessary advice.
• Child Care Tax Relief Scheme – Parents with children aged 11 or under and who meet the eligibility criteria, can now join the scheme by accessing the Government’s Tax-Free Childcare website. The scheme works by topping up every £8 you pay in with an extra £2. You can receive up to £2,000 per child. You could ensure that employees are aware of this and that it is being utilised.
• Cycle to Work Scheme – For those employees that may be looking for a cheaper way to commute due to the rising fuel costs, the implementation of a cycle to work scheme could be rewarding. This saves an employee up to 40% (dependent on tax bracket) on the cost of a bike and accessories.
• Work from Home Allowance – For those companies that already operate on a working from home basis, you could educate employees on their entitlement to a work from home allowance.
• Lifestyle discount/advance schemes – These could include discounted travel cards, season ticket loans, corporate gym membership and interest free loans.

Finally, continuing flexible/hybrid working arrangements could lead to savings as the employee would not need to pay for the cost of commuting. However, this may not be an option for all and employees may be reluctant to work from home due to the ever-increasing cost of electricity and heating.

Summary on second jobs

Times are tight for all currently and the need for more money to ensure a basic lifestyle and sufficient cash flow has increased substantially. We hope that our discussion has been beneficial and welcome any questions that you may have. If you would like any information on the schemes mentioned above, or would like information on companies that can provide tax advice for the implementation of these schemes, please let us know. Further, should you require any assistance in drafting or amending employment contracts/service agreements to make note of the above, please contact a member of the Employment team.

Visit our Employment law pages to see a full list of employment law advice we can help you with.